- XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
- The US Court rejected Coinbase’s motion to dismiss the SEC lawsuit, weighing heavily on Ripple’s legal battle.
- XRP price pulls back to $0.61 after failing to tackle resistance at $0.65.
XRP price falls slightly to $0.61 on Thursday after its landmark programmatic sales ruling in July, which gave Ripple a partial victory against the US Securities and Exchange Commission (SEC), failed to reverberate in a similar legal battle between the regulator and crypto exchange Coinbase. A US court ruled on Wednesday that the SEC’s allegations that the exchange is operating as an unregistered broker are reasonable, rejecting Coinbase’s motion to dismiss the case.
As Coinbase had based its defense partially on Ripple’s landmark ruling, this legal setback for Coinbase could have a significant impact on the regulator’s legal battle with Ripple.
Daily digest market movers: Ripple ruling likely to be influenced by Coinbase lawsuit
- The SEC’s lawsuits against payment firm Ripple and crypto exchange Coinbase are closely tied together since a ruling from the former played a pivotal role in the latter’s defense.
- Coinbase had filed a motion to dismiss the SEC’s lawsuit against the exchange, and used Ripple’s XRP Programmatic sales ruling to support their defense.
- On Wednesday, a US District court denied Coinbase’s motion to dismiss the SEC’s lawsuit against the exchange, with Judge Katherine Polk Failla effectively rejecting XRP Programmatic sales ruling .
- The XRP programmatic sales ruling by Judge Analisa Torres differentiates between the altcoin’s secondary market sales, or those made on exchanges, and the sales made to institutional investors. The ruling considers that the former does not constitute a “security.”
- Judge Failla rejected the ruling and “dealt a blow” to both Coinbase and Ripple in the latest court ruling, said former SEC attorney John Reed Stark on his X account.
Notably, the judge completely rejects Judge Torres logic in the Ripple decision that secondary sales can’t be investment contracts because the purchaser doesn’t know who they are buying from. From the ruling:
— John Reed Stark (@JohnReedStark) March 28, 2024
“Contrary to Defendants’ assertion, whether a particular transaction… https://t.co/osVBxKmF1B
- In the 84-page report, the Judge asserts that “whether a particular transaction in a crypto-asset amounts to an investment contract does not necessarily turn on whether an investor bought tokens directly from an issuer or, instead, in a secondary market transaction. (Def. Br. 13-17). For one, Howey does not recognize such a distinction as a necessary element in its test of whether a transaction constitutes an investment contract, nor have courts, in the nearly eighty years of applying Howey, read such an element into the test. Rather, under Howey, the Court must consider the “economic reality” of the transaction to determine whether that transaction is an investment contract.”
- The court ruling against Coinbase supports the SEC’s crypto regulation by enforcement, allowing the regulator to proceed with their allegations of “unregistered securities trading” against Coinbase and partially reverses Ripple’s victory in its lawsuit.
- XRP holders are likely to closely monitor the progress of the SEC’s lawsuit against Coinbase for more information that could impact Judge Analisa Torres’ ruling on XRP’s programmatic sales.
Technical analysis: XRP price likely to sweep $0.56 lows
XRP price is consolidating within the $0.65 level, which aligns with the 50% Fibonacci placeholder of the decline from March 11 peak of $0.7440 and March 20 low of $0.56. and $0.56. The declining Relative Strength Index (RSI), down to 50.47 on Thursday demonstrates bullish momentum is fading.
Meanwhile, the red bars below the zero line on the Moving Average Convergence/Divergence (MACD) indicator signal a negative momentum has crept in XRP price. A candlestick close below $0.60, a psychologically important level, could be the nail in the coffin to start a downside correction. In such a case, XRP price could sweep the March 20 low at $0.56 and collect liquidity before a rebound in its price.
XRP/USDT 1-day chart
On the upside, a daily candlestick close above $0.63, the 61.8% Fibonacci retracement level, could invalidate the bearish thesis and promote gains in XRP price. The altcoin could target the year-to-date peak of $0.7440 in its uptrend and face resistance at $0.65 and $0.67, its 50% and 38.2% Fibonacci placeholders.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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